Real Gold Prices Still Far From All-time Highs

I’m not one of these end-of-the-world guys that you see every now and then. I don’t think we need to sell everything, buy gold bars and weapons and move to Australia somewhere. But I do think it’s important to recognize ongoing trends that appear to be here to stay. One of those happens to be in precious metals. For some reason, I’ve been getting asked about Gold more frequently lately. So today, I want to take a look at an inflation-adjusted chart of the yellow metal.

This one here goes back to the 1960s and is adjusted for inflation using the Consumer Price Index. What this shows us is that although last year we hit all-time high Nominal prices for Gold, those highs were still about $600/oz away from the Real all-time highs:

So to say that Gold is in a bubble, or prices are too high or any of these things I think is a bit disingenuous. If we’re going to compare, let’s at least compare apples to apples. I believe based on this chart, there is still some room to the upside for Gold. But as we’ve mentioned here before, I think the bigger and more powerful trend is in Gold relative to Equities. On Wednesday, Gold hit 5-month highs relative to the Dow Jones Industrial Average. We’re stilling right around 7.5:1 in the Dow to Gold ratio, which is down from 44:1 in 1999.

Real Money vs Paper Money right? You can’t print more gold. So let’s see how this plays out. But to me, this is one of the most fascinating topics out there in the market. Stay tuned…



Gold Adjusted for Inflation by the CPI – All Items (